The top executives that own and operate the idle San Onofre Nuclear Generating Station (Songs) in Southern California indicated in separate conference calls on Tuesday that the plant’s fate remains uncertain, along with the 2,200 MW associated with it, which puts uncertainty into the state’s summer energy plans.
Edison International CEO Ted Craver said the cost of the outage last year totaled $400 million, and work to get both units at Songs back in service could take up to five years. In the meantime, the cost of alternatives and who will pay for them is still unknown.
Last February Unit 3 was shutdown on a precautionary basis when a small leak in one of the unit’s steam generator tubes was discovered, and a few days later damaged tubing was discovered at Unit 2, which was in the midst of planned maintenance (see Daily GPI, Feb. 7, 2012).
Craver said politics were being injected into the utility’s application to the Nuclear Regulatory Commission (NRC) for a partial restart of one of the units for a five-month period this summer. Earlier in the year California Sen. Barbara Boxer and Massachusetts Rep. Ed Markey critcized the utility’s handling of the Songs situation.
“We would never install steam generators that we thought were unsafe,” said Craver, referring to tubing that is leaking in Units 2 and 3 in four newly installed steam generators manufactured by Japan’s Mitsubishi Heavy Industries. In the immediate aftermath of the shutdown last year, gas demand for power generation in the state accelerated significantly.
“We bristle so when elected officials issue press releases suggesting that SCE [Southern California Edison Co.] was aware of design problems with replacement steam generators when they were installed at Songs. This is just not accurate and injects politics into a process that should be free from it,” said Craver.
Sempra Energy’s San Diego Gas and Electric Co. (SDG&E) holds a 20% interest in Songs, currently valued at $512 million, including $275 million of rate base. While SCE takes the lead on the troubled nuke plant, Sempra CEO Debra Reed spent some time Tuesday on her company’s quarterly conference call clarifying Sempra’s exposure and expectations (see related story).
“We have no assurance the exact length of time it will take the NRC [Nuclear Regulatory Commission] to review Edison’s proposed plan,” said Reed, adding that California regulators have opened a complex, multi-year process for determining how much of the costs of the outage and eventual restoration will be paid by retail utility electric customers. “It likely will take several years to be completely resolved.”
Because of the continuing Songs outage, SDG&E recorded replacement power costs of $77 million last year. Reed said the company has no information or insights about the supposed issues into the leaking tubes.
“I think this will be a long process to get to the root issues,” she said.
Neither Sempra nor Edison reported earnings impacts related to the prolonged outage. Edison reported increased profits from its core SCE utility operations for 4Q2012 of $812 million versus $236 million in 4Q2011. In 2012 the company earned $1.59 billion, compared with $1.1 billion in 2011. Losses for both 4Q2012 and full year were recorded for the discontinued operations at Edison Mission Energy.
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